Investing in solar stocks can be a volatile bet, but the industry has come up with a new investment more risk averse investors should keep an eye on. It's known as the yieldco, and it's a company that owns solar projects and pays investors a regular dividend yield with the regular cash flow those projects create.
NRG Energy has already created NRG Yield (NYSE:NYLD), the first publicly traded yieldco, but that won't be the end. SunEdison (NASDAQOTH:SUNEQ) is expected to launch a yieldco this year, and SunPower (NASDAQ:SPWR) recently announced what it calls a holdco/yieldco strategy.
In the following video, solar specialist Travis Hoium covers more on how these yieldco products will be rolled out and why income investors should be excited about their potential.
Travis Hoium manages an account that owns shares of NRG Yield and SunPower, and he is personally long shares of SunPower and options. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.